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News Release

Leeds

Yorkshire housing market stagnant in 2012 but growth back in 2013

says Jones Lang LaSalle residential forecast


Leeds, 4th January 2011 - Yorkshire and Humber house prices may fall slightly or remain stagnant during 2012,  although growth is expected in 2013 according to a new residential market forecast report from property consultants Jones Lang LaSalle.

Residential director at the Leeds office of Jones Lang LaSalle, Guy Ackernley, said: “Our forecasts suggest that the Eurozone crisis will continue to dent confidence during the first half of 2012, leading to some small house price falls.

“However, these problems will fade during the second half of the year and prices will regain ground to finish 2012 at roughly the same point as now (January 2012).  The fundamental issue is the low level of house building which remains far below what the country needs. With homes in such short supply, and interest rates likely to remain low, it is hard to envisage prices falling steeply.

"However, the Leeds lettings market is faring better and currently experiencing very high occupancy rates."
 
Guy Ackernley added: “People are tending to move less and this has led to historically low levels of stock and a shortage of supply. We are now starting to see rents increase across the city centre.
 
“The Leeds sales market  also picked up during 2011 with agreed sales on the second-hand market up 25 per cent on 2010 and enquiries up ten per cent.
 
“In terms of new developments, there is little choice on the market. The only two new schemes in Leeds city centre, Granary Wharf and Saxton, are experiencing good levels of demand, most of which has come from first time buyers. Granary Wharf achieved more than 50 sales in 2011 with more than 90 per cent being to owner occupiers.”
 
The reseach report says that although Northern regions will have a more difficult year than the south with average prices dropping by  two per cent, there will be “bright spots” such as York which will be relatively unaffected.

The report also shows that there are fundamental shifts occurring in the housing market which are arguably more important than price changes.

Regulatory changes, combined with on-going funding issues, suggest that mortgage volumes will remain depressed compared with those seen before the financial crisis, effectively denying homeownership to most of a generation.

Residential research director at Jones Lang LaSalle, Jon Neale added “The Eurozone crisis, combined with a stricter global regulatory environment, suggests that the mortgage market will not rapidly return to the conditions seen for much of the twenty years leading up to the financial crisis.”

First-time buyers will continue to struggle unless they have access to a significant deposit. While mortgages at loan-to-values of 80 per cent or above may become more widely available, they are likely to remain far more expensive than other products.